True Corp. Slumps on Plans for $1.7 Billion Rights Offer

  • Thailand's third-biggest mobile carrier slides as much as 12%
  • Billionaire Chearavanont's company will repay existing debt

True Corp., Thailand’s third-biggest mobile phone operator, dropped the most in three weeks after announcing a plan to raise 60 billion baht ($1.7 billion) by selling new shares in a rights offering.

The shares slid 7 percent, the biggest loss since Jan. 5, to close at 6.60 baht in Bangkok. The benchmark SET Index fell 0.3 percent, its first decline in five days.

True plans to issue 15 billion new shares at a par value of 4 baht each, according to its regulatory filing. The proceeds from the sale, whose offering price will be set later, will be used to repay existing loans and invest in its mobile business.

The Bangkok-based company, controlled by billionaire Dhanin Chearavanont, won two mobile phone licenses in auctions in November and December by offering a total of 116 billion baht. It will use funds from new share sales, loans, bonds and operating cash flows to finance the payment of new license costs, according to its statement on Monday.

The carrier is 18 percent owned by China Mobile Ltd., the world’s largest wireless operator by users.

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